MCX gold rises on dollar dip as global prices fall on rate hike bets
Indian gold prices edged higher on Monday due to a softer dollar, but the broader market remains under pressure as surging crude oil and escalating US-Iran tensions drive expectations of a Federal Reserve rate hike.
MCX gold August futures rose 0.30% to ₹1,41,322 per 10 grams and September silver gained 1.38% to ₹2,19,400 per kg in early trade. The domestic gains were driven by value buying after the dollar index eased to 100.71 from 100.87, making the metal cheaper for overseas buyers.
This uptick diverged from the US market, where gold prices dropped. Escalating Middle East tensions pushed Brent crude above $90 a barrel after the US launched a ninth consecutive night of airstrikes on Iran early Monday. US Secretary of State Marco Rubio stated that Washington remains open to a diplomatic solution, but the immediate market focus is on the inflationary impact of the conflict.
According to the CME FedWatch Tool, traders now price an 82% probability of a December interest rate hike, up from 73% last week. Higher rates increase the opportunity cost of holding non-yielding assets like gold, muting its traditional role as an inflation hedge. "Higher oil prices and a stronger dollar outweigh traditional safe-haven demand," said Ravi Singh, Chief Research Officer at Master Capital Services. He noted that while markets briefly priced a 40% chance of a July hike, those expectations have since retreated to roughly 10%.
The technical picture reinforces a negative bias. Internationally, Sugandha Sachdeva, founder of SS WealthStreet, noted gold is testing a decisive support zone between $3,940 and $3,950 per ounce, a level that has held since October 2025. Upside remains capped near $4,220. Manoj Kumar Jain of Prithvifinmart Commodity Research placed near-term international support at $3,989 and $3,945, with resistance at $4,040 and $4,074.
On the MCX, Singh noted that gold is forming lower highs and lower lows, trading below its 21-day and 55-day exponential moving averages. He identified resistance near the 21-day EMA at ₹1,44,000 and support at ₹1,36,000, recommending a "sell on rise" strategy. Jain pegged immediate MCX gold support at ₹1,40,400 and ₹1,39,650.
For silver, Jain set MCX support at ₹2,14,400 and ₹2,11,000, with resistance at ₹2,18,800 and ₹2,21,000. He advised long-term investors to accumulate metal via systematic investment plans, but urged active traders to maintain strict stop losses on closing bases at ₹1,39,650 for gold and ₹2,14,000 for silver. Sachdeva warned that a decisive weekly close below ₹1,40,500 for domestic gold would confirm a breakdown, accelerating a decline toward ₹1,37,000 and then ₹1,35,000.
